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How Corporate Legal Teams Are Slashing Litigation Costs

by Petra Pasternak

In-house legal professionals know that when a new case hits, surprise ediscovery costs can make expenses skyrocket with breathtaking speed. 

To rein in costs and bring more predictability to their budgets, today’s corporate legal teams are rethinking their litigation strategies. A major priority for many is better managing law firm spend. By bringing oversight of discovery work in-house and leveraging technology, companies aim to handle disputes more effectively while keeping expenses in check. 

This shift reflects the ongoing push for legal departments to operate more leanly in an environment where outside counsel costs rise every year and corporate data volumes outstrip the resources to handle matters effectively.

For example, one leading U.S. insurance company began to see results within a year of bringing the discovery process in-house, including a lower combined ratio, a key metric used to assess profitability in the insurance industry. They’re counting other advantages, including: 

  • More insight into outside counsel billing and strategy,

  • Closer collaboration on ediscovery with their law firms, and

  • Reduced data-related fees, such as hosting and ingestion fees

Bringing Work In-House for Lower Costs and Greater Control

Litigation costs are up across the insurance industry. That’s in part due to larger cases with increasingly large demands, as well as the growing size of jury verdicts. The flood of data that a typical business generates today compounds the challenge. Ediscovery costs, which can represent up to 70% of litigation expenses, often spike suddently, creating an untenable situation – making for complicated conversations with the finance department. 

Facing these pressures, one of the insurer’s goals was to bring as much work in-house as possible. Internal management of ediscovery processes through a hosted solution promised far greater control.

It was critical to first know how much data the company was processing annually and the associated costs. The next step was to compare various ediscovery vendors. 

The team explored a number of platforms and compared pricing models. It was clear that eliminating the costs associated with hosting and processing of the company’s data would add up to significant savings. 

Eliminating Add-On Data Costs

Traditional ediscovery vendor agreements come with a host of add-on costs. That includes extra payments per gigabyte for ingesting, hosting, and producing data. Many other platforms also add cost per gigabyte for email threading, de-duplicating, or predictive coding, and charge per-user fees. It all adds up.

With Everlaw, whose pricing model offers special features, onboarding, and support at no extra cost, the insurer has been able to reduce those expenses. Cuts in user access fees represent additional monthly savings, as do per-gigabyte production costs. 

In addition to the hard cost savings, real-time access to the platform provides visibility into matters and hours billed by external partners, providing the predictability the team sought. 

Building More Collaborative External Relationships

Another benefit of working from a unified platform for ediscovery is improvements in transparency and collaboration between disparate teams. For the insurance company, that's possible now that everyone works within a centralized space.

The new approach allows the in-house team to decide what work – and how much of it – to outsource to external partners. Greater visibility into the quality and progress of work by outside counsel has enabled the team to strengthen relationships with its law firms.

The team is also seeing a more accurate recording of time from its professional services providers, putting them more in tune with the discovery process than they would be if their partners were using their own solutions. 

With real-time access to data and the work that’s carried out within Everlaw, the insurance company’s internal team can better understand the strategy being pursued by outside counsel – and have more say in shaping it.

When everyone is on the same page, communications and collaboration are more productive. 

More and more corporations are finding that the traditional approach to ediscovery – outsourcing all work to outside counsel or service providers – is no longer viable. The flaws in the model lead to higher risk exposure, silos instead of collaboration, and escalating costs.

Facing growing headwinds, insurance companies need to find new ways to minimize costs beyond early settlement or mediation. That includes novel approaches to litigation. 

Bringing oversight and control of the ediscovery process in-house is a fundamental shift that empowers in-house teams with greater control over their data and workflows and predictability in their budgets.

To learn how others in the legal industry are handling the toughest litigation and investigations challenges, check out our customer success stories.